Domestic Pigouvian Taxation and Technological Spillovers under International Emissions Trading

Amanda Spisto ()
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Amanda Spisto: Faculty of Economics, University of Rome "Tor Vergata", http://www.ceistorvergata.it

No 234, CEIS Research Paper from Tor Vergata University, CEIS

Abstract: I model an economy featuring two representative firms in two countries, one in each country, where one firm innovates and generates technological unilateral spillovers. I analyze a partial equilibrium model in two different scenarios: in the first one, the innovating firm is under a domestic emissions taxation, while the other country does not implement any environmental policy. Government of the innovating firm introduces a tax credit aimed at incentivizing investment in cleaner abatement technologies. Finally, in the second scenario, the two countries take part to an international ETS. Comparisons among results from di¤erent scenarios are shown in the analytical part of the study. I conclude that, under specific assumpitons, overlapping regulations might be welfare improving.

Keywords: Pigouvian Taxation; International ETS; policy mix; trans- boundary pollution; international technological spillover. (search for similar items in EconPapers)
JEL-codes: H23 Q58 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2012-05-08, Revised 2012-05-08
New Economics Papers: this item is included in nep-ene and nep-env
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